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Private capital: Mega closures lead to record year

Closed signA number of mega fund closures made 2017 a record-breaking year for the private capital industry, even though total fund closures declined from 2016.

Preqin, an alternative assets data provider, said a total of 1,420 private capital vehicles - which includes private equity and private debt - raised a combined $754 billion (€626.6 billion) from investors in 2017.

2017 saw the largest private equity fund to ever close - the Apollo Investment Fund IX which raised a reported $24.6 billion (€20.4 billion).

There was a strong final quarter of the year, with 261 private capital funds closing after raising $162 billion.

Preqin said that while the record amount of capital committed to the industry will be an encouraging sign for fund managers, the twin pressures of fundraising competition and capital concentration may be a concern in the months ahead.

In private equity, buyout deals remained on par with 2016’s activity, with 4,191 deals worth a total of $347 billion. Preqin said it expected the figures to rise by about 5% as more information becomes available, putting 2017 broadly level with the 4,271 deals completed in 2016.

While deals of less than $100 million accounted for the largest proportion of the number of deals, deals of $1 billion or more accounted for almost 70% of all deal value in 2017. North America attracted the most capital through the year.

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